Ambushed by fighters of the Mahdi army, the soldiers of the Princess of Wales's Royal Regiment attacked with everything they had, from bayonets to tank shells.

The fierce gunfight became known as the Battle for Danny Boy, the name British troops gave to a junction on Route 6, just south of Amara on the road to Basra.

If allegations made yesterday are true, the battle on May 14 2004 also led to the torture and execution of up to 20 Iraqi civilians, some of whom were mutilated before they died. It may be that British soldiers and officers covered up "one of the most atrocious episodes in British army history," lawyer Martyn Day said yesterday.

Allegations of mistreatment of Iraqi civilians at Camp Abu Naji, the British base near Amara, were first reported in the Guardian a month after the battle. Military police were asked to investigate and cleared the soldiers of any wrongdoing.

Day and fellow lawyer Phil Shiner pursued the case of the surviving Iraqi civilians and collected witness statements. Last month, a report by a senior army officer admitted that British troops deployed in Iraq were given "scant" information on how to treat civilian detainees and needed "a better understanding between right and wrong".

This month, the high court dismissed an attempt to prevent the Guardian from repeating the original allegations of serious abuse of Iraqis by British soldiers, and described the way the Ministry of Defence handled the case as "barmy".

In London yesterday, the lawyers disclosed fresh witness statements by five of the Iraqis, photographs of corpses and death certificates of the men who died.

Detailed witness statements from the five men - Hussein Jabbari Ali, Hussain Fadhil Abass, Atiyah Sayid Abdelreza, Madhi Jassim Abdullah and Ahmad Jabber Ahmood - describe what they heard while in detention, when they said they were cuffed and forced to wear blacked-out goggles.

The statements tell of hearing other men screaming, moaning in pain and choking, and the sound of gunfire. Abdelreza's statement says: "I believed people were being killed. I have never heard anything like that sound ever before in my life. It shocked me and filled me with such terror."

The five include two farmers, a student, a taxi driver and a baker, according to the statements. Their lawyers said they had "absolutely nothing" to do with the insurgent Mahdi army.

Death certificates of Iraqis who were killed, also disclosed yesterday, describe how they came to their brutal end. "Several gunshot wounds to body - severance of sexual organs," one states. "Gunshot to head," another reads. One notes: "Gunshot in face, pulling out of the eye, breaking the jaw, gunshot to the chest."

Day is seeking compensation for those who survived the alleged ordeal. Shiner is seeking a judicial review of what he says is the failure of the MoD to conduct a proper inquiry into the allegations. The Human Rights Act demands an independent public inquiry when there is prima facie evidence of serious wrongdoing by the state, he has told the high court.

He said yesterday that the record of the army prosecuting authorities demanded that the issue should be taken out of their hands. The attorney general should intervene immediately and Scotland Yard should take over the case, he said.

Shiner admitted that much of the evidence relied on the interpretation of what the five Iraqis heard while blindfolded. No postmortem examinations had taken place on the bodies of the 20 dead men. But on the basis of the evidence he believed his clients were telling the truth.

"It may be that none of this happened. We need a public inquiry to establish the facts." The British soldiers, he said, had been engaged either in "acts of immense bravery or acts of incredible brutality". He added: "We're not saying we know what happened; we're saying on the balance of probabilities we think our clients are telling the truth."

Day said: "The burning question for us as a nation is whether these 24 hours represented the British army at its best or the British army at its worst".

Yesterday's witness statements implied that Iraqi men had been executed by being shot at close range, strangled or having their throats cut, the lawyers said. British soldiers have said they were told to take some bodies of dead Iraqis back to their camp, though it is unclear why.

A Panorama programme on the incident will be broadcast on Monday. A BBC spokesman said yesterday: "Panorama has spent over a year talking to battlefield survivors, medical staff and Iraqi former prisoners in Iraq, Turkey and Jordan.

"The programme critically examines claims made by lawyers who are representing the Iraqis in their action against the British government.

"Of all the allegations they make, the programme concludes that the evidence is strongest that prisoners were mistreated. Panorama has seen no proof that prisoners died at the hands of their captors at or after the Battle of Danny Boy."

A spokesman for the MoD said yesterday: "Allegations of mistreatment, unlawful killing and mutilation by British troops following an incident at Vehicle Checkpoint Danny Boy were thoroughly investigated by the RMP [Royal Military Police].

"Their investigation lasted 10 months, involved the interviewing of over 150 British personnel and 50 Iraqi nationals, and found no evidence to support these allegations. New allegations are part of an ongoing RMP (Special Investigation Branch) investigation and judicial review, and it would be inappropriate to comment further."

Referring to previous cover-ups of abuse by British troops as well as the latest allegations, Shiner said yesterday: "Until we as a nation face up to this evidence we cannot hope for the fundamental reforms required to ensure these things never happen again." He added that the British did not want to be talked about "in the same vein as the Japanese in the second world war or the Americans at My Lai".

In his book Dusty Warriors, Richard Holmes describes the Battle for Danny Boy and its aftermath. He said the British soldiers found that a large crowd had assembled and when they returned to camp they reported that there was "a rumour circulating that the dead had been captured alive and then executed".

The two lawyers said yesterday they had asked the MoD for copies of the army's medical logs, photographs and the military police report into the incident. The ministry, they said, refused to hand them over.